Bellevue Real Estate » Foreclosed

Distressed Inventory Report 12-25-10

George Thurtle — Wed, 29 Dec 2010 18:34:14 +0000

Being Christmas I did not do a new report. I just copied the previous week’s numbers as a place holder to start the New Year. everyone have a good Holiday and let’s see what next year brings.

The spreadsheet is here: Bellevue Foreclosure Report 12-25-10

Distressed Inventory Report 11-13-10

George Thurtle — Tue, 16 Nov 2010 01:51:41 +0000

The numbers keep riding but the rate has slowed. The Notice of Trustee (NTS) is where most of the activity is occuring. In West Bellevue there was 5 new NTS in this week alone. This area had seen the least activity over the last few weeks. The other areas had a much more modest increase in inventory and NTS activity. The major issue is though is a lot of the new activity is in lower end condominiums. The amount of listed inventory both short sale and bank owned seems to be declining. This should change in the next few weeks as these new NTS sales go through foreclosure. It can take these banks a long time to bring inventory to the market. In some cases over 90 days.

As we have discussed last week the quality of the inventory seems to be degrading with most of the inventory coming on being lowered priced homes needing repair or even worse old condo conversion units. However this week there is an exception. There is a home located at 2730 1o5th Ave SE in Beaux Arts. This home is a little over 5000 sq. ft. and is located in a prime area of West Bellevue. Beaux Arts is a private community which has retained a very natural character and is located close to downtown Bellevue and I-90 access. In addition this community has 1100 ft. of community beach on Lake Washington. This home was a builder’s own personal residence and was exquisitely done. This is one of tail ends of the nicer new comes coming to the market. This home was foreclosed on about six weeks agao and will be listed in the next couple of weeks. It was at $1,680,000 as a short sale. If you figure about $300 per sq. ft. that would put the value at about $1,500,000. Anyone interested in this home should get a hold of me and we can discuss the best way to approach an offer. The bank selling the home is Wells Fargo and they have a policy of not accepting offers from the public for almost two weeks. In the early stages of the listing they only accept offers from municipalities and non-profits. So if you make an offer initially they just sit on it and wait for other offers so your best timing is right after they begin accepting offers from the general public. The only good news about Wells Fargo is they tend to list high and their inventory will age and at some time they will capitulate. After 30 days then is the best time to make the offer. If this one gets listed over $1,500,00o I think that is what might happen here.

Here is the spreadsheet: Bellevue Foreclosure Report 11-13-10

Distressed Inventory Report 10-23-10

George Thurtle — Sat, 23 Oct 2010 18:28:54 +0000

The amount of Distressed Inventory keeps declining. The Notice of Trustee sales are seeing some very large week to week reductions. The issue is if this decline is the result of underlying market fundamentals or is because the banks have stopped processing foreclosures. First of all not thay many banks stopped processing and most of them have started processing foreclosures again including Bank of America. Antidotally I am seeing a lot of short sales closing but not a lot of replacement inventory. Many short sale listings that were “aged” have either gone to foreclosure or many of them recently have been sold. In addition it appears that the economy has stabilized enough that the tail end of the distressd inventory from people hanging on is getting worked through the system. Ten percent unemployment will keep new homes coming into the system but the wave of distressed inventory generated by the economy locking up in the fall of 2008 seems to be dissapating on the beach now.

The only area with any increase at all, and this was very mild, was West Bellevue. some areas such as East Bellevue are down almost 60% from their peak of total distressed inventory. Also if you look at the MLS inventory short sales are not balloning which would be the logical conclusion if the lenders stopped foreclosing. The short sale process does not require a foreclosure and the lender does not have to prove they have the rights to the note and deed of trust as in a foreclosure, all they have to do is release their interest. If you are looking for distressed inventory there is less to select from and the window of opportunity may be closing if more buyers start entering the market next spring. I know there is a theory that another foreclosure wave is coming with the major ARM resets happening in 2011 and 2012 but I am not seeing it here locally. In addition I am seeing banks respond and process short sales in a much more timely manner. Let’s see what the trends are in the next couple of weeks.

The spreadsheet is here: Bellevue Foreclosure Report 10-23-10

Distressed Inventory Report 10-16-10

George Thurtle — Sat, 16 Oct 2010 15:39:06 +0000

I am finally caught up now with having the reports become more timely. I will get into the specifics of this week’s numbers but first want to discuss the big news of the last couple of weeks and that is new mess caused by the mortgage servicers not following proper foreclosure procedures. As has been in the news Bank of America has stopped foreclosures on residential homes and many other servicers have pulled back from foreclosing. The upshot is that you will start seeing less homes going to foreclosure and more emphasis on short sales. The reason that lenders will most likely go to more short sales is that they do not need to take title and demonstrate they have taken title properly, they only need to release their interest in the title the present seller has. It avoids the somewhat involved process of forfeclosure to properly acquire title. However what this will do is cause the amount of publicly recorded distressed inventory to decline. Until this probelm gets worked out a better gauge in the future will the amount of MLS listed short sales. So in future reports let’s see if the amount of MLS listed short sales starts increasing and see if the amount of recorded notice of trustee sales starts declining.

The same trend continues an overall reduction in NTS inventory and some big declines in that inventory. 98007 saw a reduction of 7 homes alone in the zip code. It appears that lenders are starting to work more with short sales. Also this week there were couple of new $1,000,000 plus foreclosures in the Gelndale area. However these banks appear very agressive on their pricing and these homes will probably have to sit for a while before the lenders get realistic on their pricing.

Next week there will be a series of posts describing what is happening with the foreclosure mess.

The spreadsheet is here: Bellevue Foreclosure Report 10-16-10

Distressed Inventory Report 9-18-10

George Thurtle — Sat, 18 Sep 2010 15:54:49 +0000

The amount of Distressed Inventory appears to be peaking. At some point time the Distressed Inventory needs to be wrung out of the system. Until the economy picks up it will take a while. What I am seeing is that the low end condominiums are generating a lot of the inventory and the pricing on those really seems to be getting hit. The better priced lower quality inventory in East Bellevue seems to be declining substantially.

The Spreadsheet is here: Bellevue Foreclosure Report 9-18-10

Distressed Inventory Report 7-31-10

George Thurtle — Sat, 31 Jul 2010 15:33:51 +0000

The overall rate of the distressed inventory increase appears to be slowing. The number of bank owned homes are down a little and in East Bellevue there actually was a small overall decline in distressed inventory.

The Notice of Trustee Sales (NTS) keep rising and in zip code 98008 there were 5 notices alone. Most of the foreclosure and short sale activity is in condominiums. There are a couple of high end properties but overall those have declined.

The bulk of the opportunity in distressed properties appear to be in homes under $500,000.

The spreadsheet is here: Bellevue Foreclosure Report 7-31-10

Distressed Inventory Report 7-10-10

George Thurtle — Sun, 11 Jul 2010 05:09:01 +0000

The numbers just keep creeping up. No big spikes and the numbers may be peaking but they are still increasing; not holding steady or declining. Again the listed invetory for distressed property is not climbing in relationship to the actual inventory of Distressed Property. Looks like the new distrssed inventory will not be coming to market until September or October. The question is how big of a depressive effect this will have on the market. General rule of thumb on market timing is to buy on the backside of the distressed inventory decline and at the peak of the MLS listings. Those people who did that in Q3 2009 got some of the better transactions. However overall I would say the quality of the inventory is declining. The distressed new construction is almost gone except for unfinished homes and the distressed homes coming to market are not in that good of condition. Buyers want the homes in good condition because they do not have the money to fix them. As a result many of these homes will need to be sold at steep discounts which will overall be a depressive effect on prices for the new few months at least.

The spreadsheet is here: Bellevue Foreclosure Report 7-10-10

Distressed Inventory Report 6-19-10

George Thurtle — Sat, 19 Jun 2010 15:27:32 +0000

The numbers held steady this week with very little change. After the increases of the last couple of months there may be signs of the distressed inventory leveling off. There is some market activity as you can see on the spreeadsheet as there were new NTS in each area but apparently there was an offsetting amount of inventory being removed from the market.

The one thing though is that if you look at the spreadsheet is the MLS listed bank inventory is at an all time low. There has always been a big gap between the bank owned homes on the public record and the actual homes listed in the MLS and this trend appears to continuing even more dramatically. If anyone has any ideas or explanations for this please give us your perspective for this. I have mine which is the bank servicers are overwhelmed and the banks refuse to staff up to handle these homes because of the negative impact to their bottom line but I think there is more going on; so if anyone has any insights please let us know.

The spreadsheet is here: Bellevue Foreclosure Report 6-19-10

Distressed Inventory Report 5-22-10

George Thurtle — Sat, 22 May 2010 17:47:55 +0000

Here we go. Definitely seeing an up trend. The amount of foreclosed homes is not spiking but the notice of trustee sales (NTS) are steadily increasing. In the weeks before we saw maybe one to to new NTS and in many cases the amount of homes selling was offsetting the new NTS. Not the case anymore. It appears that the sales of the foreclosed homes have slowed down and the NTS homes are coming to the market at about 4 to 5 a week in each area and then throw in a couple of projects that are going to auction and you have steadily increasing distressed inventory.

In the last cycle last year we saw prices soften until the inventory peaked and then declined. The best buys were on the backside of the decline in distressed inventory just after the peak. The overall economic news will keep rates lower and jobs seem to be going nowhere for now so I don’t see much upward pressure. The issue now is there is almost no new inventory and most of the inventory is now resale. In my opinion this means two things. The first is that if you are a and have a resale home fix it up as close to new as possible to get a jump on the competition. This will give you an edge over the short sales and bank owned homes that need a lot of work. Then price accordingly just because you have seen a number of homes in your neighborhood sell don’t delude yourself into thinking you will get any premium. You are going to struggle to get the sale.

If you are buyer don’t over estimate the amount of competitive buyers that come out of the woodwork all of a sudden for a good home at a good price. I see this happen over and over a few smart sellers price to sell and nothing else sells but there is a multiple offer situation on that one house. The reason is there is no shortage buyers but they will only pay a certain price and are very discretionary. My wife just went through this process. A buyer she had been working with for almost two years finally purchased a home. However the home was in good condition and priced well below the competition at almost $20 per sq. ft. less but at the average per sq. ft. sale price for the neighborhood last year. There were three offers on it two days and the home went for $5,000 over the list price. If he would not have received this obvious value he would have just stayed put. This will be the nature of the market for the next couple of years.

The spreadsheet is here: Bellevue Foreclosure Report 5-22-10

Distressed Inventory Report 5-1-10

George Thurtle — Sat, 01 May 2010 15:19:44 +0000

Things seem to be churning. East Bellevue which saw its distressed inventory climbing saw another slight drop this week while West Bellevue had a jump up in both notice of trustee sales and foreclosed inventory. South Bellevue was holding steady but saw its foreclosed inventory reduced and the notice of trustee sales increase. Overall it looks like things are tending a little bit towards an increase in distressed inventory with the addition of the new notice of trustee sales. However it does look like the area which had seen a run up in distressed inventory, East Bellevue, has now peaked and is churning its inventory.

As I stated in my first of the year predictions I thought we would end 2010 on an up note but that first we had to work through those people who had drained their resoruces hanging on and that we would see some downward movement. I think that is what we will see the next three months a gentle rise in distrssed inventory and a peak in September. Let’s see if that happens.